Rumours of Tate & Lyle patent expiry to cut costs of sucralose?
sucralose, as analysts suggest key patents held by the market
leader Tate & Lyle may soon come to an end, reports Lindsey
Partos.
Sold under the Splenda brand, the sucralose sweetener patented in the mid-70's is currently bringing strong gains to patent holder Tate & Lyle.
Fresh demand has pushed the firm to extend Splenda facilities at its Alabama plant, as well as bringing a new $175 million factory online next year in Singapore.
But analysts say the pressure of generics is creeping up behind the firm.
"It is virtually impossible to patent a food: ultimately generics will destroy the pricing structure," a London food analyst tells FoodNavigator.com.
Reports in the financial press this week reveal investment bank Goldman Sachs downgraded Tate & Lyle to 'underperform' from neutral.
The bank suggests the artificial sweetener will face competition from alternatives soon as important expiry dates in 2006 and 2009 for patents could motivate the competition.
Tate & Lyle filed the original product sucralose patent in 1976, this recently expired, opening the product up to competitors. But the Goldman Sachs report is likely to refer to later production process patents, those which enable the laboratory-designed product to hit the shelves.
Tate & Lyle declined to comment on the 'individual patents', but said to FoodNavigator.com that the firm is "confident in the patents we have".
The UK sweetener company currently has 32 different patents (from commercial blends and products to processing) protecting Splenda; but it is not just the patents that are supporting the market leadership, says Tate & Lyle.
"The product is well established, we have a 3rd generation plant, we're the leaders and we are expanding," says the Tate & Lyle spokesperson.
But despite this market armament, one day, possibly soon, the firm will face competition (likely from China); heralding lower costs for food and beverage makers as sucralose makers compete for market share.
